Imported beer wave worries brewers

Domestic beer producers are somewhat concerned about increasing inflow of imported beer following a recent reduction in import taxes.

Although locally produced beers dominate the market today, more visibility and easy availability of imported products could eat into their market shares, they feel.

According to the Viet Nam Alcohol, Beer and Beverage Association, the Heineken brand has 70 per cent of the market share in higher-grade beers, but a recent decision to allow the import of 650,000 cases of the same brand from Holland has run into some criticism.

Although a document signed by Deputy Minister of Industry and Trade Le Danh Vinh says these beers are for marketing and market research purposes, some traders and market observers said the cases were of two dozen 330ml cans each, which is already produced in this country.

Tran Huy, a distributor of imported beer in HCM City, said Heineken 330ml beer cans were produced in Viet Nam. The country only needed to import 500ml cans and 250ml bottles, he said.

The Sai Gon Port Customs’ Sub-department Zone I, through which 80 per cent of goods imported to HCM City and neighbouring provinces pass through, said the import of beers for business purposes was not of large volumes thus far.

It said that the Viet Nam Brewery Ltd Co had spent nearly VND195 billion (US$10.2 million) on importing the latest batch of Heineken beer at about VND300,000 per case.

A domestic beer producer said the import of such a large volume of Heineken beer for marketing and market research purposes was not logical because the company already had a firm standing in the domestic market for the last 10 years.

Since the brand already dominates the higher-end market, this import must be for business purposes, he surmised, adding that even for the popular brand, customers preferred imported beer to those produced in Viet Nam.

Domestic beer production has surpassed demand, and many beer factories are not yet operating at full capacity, he noted.

The Viet Nam Alcohol, Beer, Wine and Beverage Association estimates annual beer consumption at about 28 litres each person.

Currently, the country has about 350 breweries, about 20 of which can produce more than 20 million litres per year, and more than 260 that make less than 1 million litres each year.

Industry insiders say that a sharp decrease in special consumption tax has attracted many foreign beer makers to eye the Vietnamese market.

Cat Lai Port Customs officials say that the special consumption tax on beer products for the 2010-12 period has been set at 45 per cent, down from 75 per cent last year.

A recent international food and beverage exhibition in HCM City saw the participation of many foreign beer brands seeking distributors to penetrate the Vietnamese market.

Australia’s Lucky beer, for instance, was urgently seeking distributors in Ha Noi and Da Nang to supply the products to supermarkets, hotels and restaurants.

Similarly, Belgium’s Leffe dark and lager beers, targeting the high-grade market segment, were already present in supermarkets and retail shops in HCM City at around VND66,500 ($3.5) per 330ml bottle, compared to Heineken’s VND12,500.

Another brand, the Hoegaarden lager imported by An Nam Foodstuff Co. was also being sold in local markets at around VND66,000 per 330ml bottle.

At many bars, hotels and restaurants, the Corona and Budweiser beers imported from Mexico and the US respectively are selling very well.

The Sai Gon Port Customs Sub-department Zone I said that since the beginning of this year, 33,842 beer cases and 40,140 bottles were brought in through the Cat Lai Port, for an import turnover of $282,661, an increase of nearly 55.2 per cent over the same period of last year.

The beers are mainly imported from Mexico, Belgium and Germany, it said. — VNS

Tags: Vietnam beer imports